Borse Dubai sells key stake in London Stock Exchange

Borse Dubai has sold its significant stake in the London Stock Exchange, sending the British group's share price plunging on Thursday.

"Borse Dubai has today sold its shareholding in London Stock Exchange Group plc, representing approximately 17.4 per cent of the share capital in the company," said a statement issued by the Gulf group, which was the biggest single shareholder in the LSE.

The stake is worth £1.53 billion ($2.29 billion, 2.08 billion euros) according to the LSE share price at the close of trading on Wednesday, at 2,538 pence.

In Thursday deals following the announcement, LSE crashed to 2,288 pence, down 9.85 per cent on London's benchmark FTSE 100 index, which fell 1.15 per cent to 6,910.79 points overall in morning deals.

"While details remain scant, the sale was probably worth around £1.5 billion and ends a... reduction process designed to crystallise handsome gains thanks to many years of hopes of another round of exchange mergers, which have seen LSE shares double from 2007 levels," said Mike van Dulken, head of research at trading group Accendo Markets.

The Qatar Investment Authority takes over as the biggest LSE shareholder. QIA cut its holding to about 10 per cent from 15 per cent last year according to Bloomberg News.

Borse Dubai rules out Nasdaq OMX Group stake sale

Borse Dubai ruled out any sale of its shares in Nasdaq OMX Group on Thursday after shedding its entire 17.4 per cent stake in the London StockExchange (LSE).

The firm had been the biggest single shareholder in the LSE prior to the sale, which occurred on Wednesday through a so-called book building process which a source familiar with the matter told Reuters on Thursday happened at 22.50 pounds a share.

This would equate to a total sale worth 1.36 billion pounds ($2 billion), according to Reuters calculations. Shares in LSE fell sharply as a result, down 10 per cent to 22.83 pounds by0910 GMT.

Borse Dubai, the holding company for Dubai Financial Market and Nasdaq Dubai, confirmed on Thursday it had sold its LSE stake without disclosing the price.

In a separate response to questions from Reuters, a Borse Dubai spokesman said it had ‘no current intention’ to sell its stake in the United States financial services firm that owns Nasdaq and multiple European stock exchanges.

Borse Dubai is the largest shareholder in Nasdaq OMX, owning17.64 per cent of the company, according to Thomson Reuters data.

Borse Dubai sold its LSE stake as the share price was at an all-time high and it was the ‘appropriate time to monetise’ its investment, the spokesman told Reuters in an emailed response to questions.
It became a major shareholder in Nasdaq in a complex deal in 2007, also buying a 28 per cent stake in the LSE from Nasdaq for1,414 pence per share.

The proceeds from the stake sale would be used for general business purposes, he added.

The LSE stake sale was managed by Bank of America-Merrill Lynch, Barclays and Nomura International, a Borse Dubai said.

Borse Dubai previously sold a chunk of its LSE stake in September 2014, representing around 3.1 per cent of the company's issued capital.

It said then that it had ‘no current intention to sell any further shares’ and it remained ‘a long-term supportive shareholder.’


 

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